The new Lifetime ISA (LISA) commenced on April 6, 2017.
The basic rules are as follows:
You must be over the age of 18 and you can save up to £4,000 each tax year as long as you don’t exceed the annual overall ISA limit ( £20,000 for the current tax year).
The Government will give you a 25% bonus on the total amount you pay in (excluding interest or investment growth).
Money transferred into a Lifetime ISA from another ISA is also eligible for the government bonus.
You may have to pay back the bonus if you withdraw from your Lifetime ISA unless
(a) The funds are used to purchase a first home up to a value of £450,000
(b) You become terminally ill
(c) You reach the age of 60
For further information on the new Lifetime ISA or any other tax matter contact Peter Way Rider, tax manager at Ellis & Co on 01244 343504.